That headline from the WSJ's Real Time Economics blog reminded me of the "Home Sweet Florida" chapter in Only Yesterday....

...Here are some snips from Frederick Lewis Allen's Only Yesterday:...

...“The final phase of the real-estate boom of the nineteen-twenties centered in the cities themselves.......The metropolis, too, had a future, but speculative enthusiasm had carried it upward a little too fast.”...

From CNN Money:

The crisis on Wall Street hasn't hit the high cost of Manhattan real estate, but the economic slowdown has curbed the number of deals in the Big Apple, according to reports out Friday.

Sales figures from four major New York real estate agencies showed the average price for a Manhattan apartment rose in the third quarter over last year. At the same time, the number of apartments sold in the quarter declined sharply....MORE

That article didn't see price depreciation, yet. On the other hand, here's the Financial Times via naked capitalism:

The Financial Times reports that residential real estate prices fell in the third quarter in Manhattan, according to data from a real estate appraisal firm.

Getting good data about Manhattan real estate activity can be a tricky affair, since a big chunk of the market is co-operatives (buyers acquire shares in the co-op corporation, which then give a proprietary lease to the unit) and those sales are not recorded with the city. However, the seemingly favorable comparisons have masked earlier signs of decay. As happened in other markets, demand for the best properties held up well, while the rest of the market eroded, and a higher proportion of big-ticket sales led to rising averages.

The story also does not mention that the city was in the throes of a major building boom, and there are more apartment buildings coming on the market (two large ones within a ten minute walk of my apartment, for instance). That inevitably will have a further price-depressing effect.

Manhattan real estate prices have joined the rest of the US in a downward tumble.

The average sales price of property on the island fell by 11.3 per cent to $1,480,363 in the three months to the end of September according to data from Miller Samuel, a real estate appraiser, compared with the previous quarter....MORE